Nifty-500 clocks highest earnings growth in 8 quarters

India Inc clocked its strongest quarterly earnings performance in two years in the third quarter of FY26, buoyed by broad-based sectoral growth and signs of a steady recovery in demand, according to a report released on Sunday by Motilal Oswal Financial Services.

The brokerage’s analysis of the Nifty 500 universe showed aggregate earnings rising 19 per cent year-on-year in 3QFY26 — the fastest pace in the past eight quarters. Excluding financial stocks, profit growth was even stronger at 23 per cent. Even after stripping out metals and oil & gas companies, earnings expanded a healthy 15 per cent, underlining the depth of the recovery across sectors.

Revenue growth also gathered momentum. Aggregate sales of Nifty-500 companies increased 11 per cent year-on-year, marking the highest growth rate in 11 quarters. During the period, total sales stood at roughly Rs 36 lakh crore, while EBITDA was about Rs 8 lakh crore and adjusted profit after tax around Rs 4 lakh crore.

Commodities led the earnings surge. The oil & gas sector recorded a sharp 38 per cent jump in profits, while metals companies posted 34 per cent growth on a favourable base. Public sector banks delivered 18 per cent earnings growth, and non-banking financial companies (NBFCs) reported a 19 per cent rise in profits, reflecting improving credit demand and stable asset quality.

In manufacturing-linked sectors, the automobile industry — excluding tractors and passenger vehicles — reported 27 per cent profit growth, aided by festive demand and the impact of GST rate cuts. Capital goods companies registered 24 per cent earnings growth, supported by strong order inflows and sustained government expenditure in power transmission, defence and renewable energy.

The cement sector staged a notable rebound, with profits surging 46 per cent after several subdued quarters, helped by a 7–8 per cent demand recovery. The telecom sector more than doubled its profits to Rs 31 billion during the quarter, reflecting improved realisations and operating leverage.

Mid- and small-cap companies outpaced their larger peers. Earnings of Nifty Midcap 150 companies grew 20 per cent year-on-year, while Nifty Smallcap 250 firms posted 26 per cent growth on a softer base. In comparison, earnings of Nifty 100 companies rose 18 per cent.

The report suggests that the latest quarter reflects a combination of cyclical recovery in commodities, resilient domestic demand, and sustained public capital expenditure — factors that together have propelled corporate India to its strongest earnings showing in two years.

With IANS inputs